Interview of the week

Elisabeta GJONI, Chairperson, Albanian FSA

In 2010 the insurance market structure was dominated by compulsory motor insurances with 52% of the overall market premiums, while voluntary insurances take up 48% of the market structure. In 2007, compulsory motor insurances dominated the market structure with about 65% of the overall gross written premiums; nevertheless the high growth dynamics of voluntary insurance in the last three years has impacted the market structure significantly, causing the motor compulsory insurance to gradually lose its dominance in the market.

XPRIMM: How do you assess the evolution of the Albanian insurance market in 2010 compared to 2009? Elisabeta GJONI:
The Albanian insurance market has experienced high and consistent
growth rates during the last years, averaging as high as 20% for the
last three years. In 2010 the growth rate was about 4%, which should be
seen positively in the context of an overall economic slowdown, followed
by a slight decrease in the number of contracts by 2.6% compared with
year 2009. The market continued to be dominated by Non-Life insurance,
constituting 89% of the total premium volume. In 2010 the insurance
market structure was dominated by compulsory motor insurances with 52%
of the overall market premiums, while voluntary insurances take up 48%
of the market structure. In 2007, compulsory motor insurances dominated
the market structure with about 65% of the overall gross written
premiums; nevertheless the high growth dynamics of voluntary insurance
in the last three years has impacted the market structure significantly,
causing the motor compulsory insurance to gradually lose its dominance
in the market. Life insurance experienced as much as 17% growth in
gross written premiums in 2010, continuing the trend of the recent
years, despite the small share life premiums have in the overall market
structure.

XPRIMM: How did the financial crisis affect the Albanian insurance market?E.G.:
The financial crisis did not have a direct impact on the insurance
sector in Albania. However due to a slowdown in the economy, the
insurance sector in Albania during the financial turmoil experienced a
slight decrease in growth rates but managed to maintain a positive
growth on average. Some of the reasons that the financial turmoil did
not have direct impact on Albanian insurers are such as the market
structure mainly dominated by compulsory insurance, a resilient banking
sector to the crisis, the lack of complex products in the market, an
investment policy oriented toward liquid investments and no capital
market exposure as well as lack of problem transfer by strategic
investors to their subsidiaries in the Albanian market.

XPRIMM: What are the development perspectives for 2011?E.G.:
Among the main challenges for the Albanian insurance market for the
years to come remains the improvement of the market structure in favour
of voluntary insurance as well as introduction of new voluntary products
to meet the market demands. The progress in the health sector reform,
might significantly impact the market structure. Another important
aspect is the claims handling process, especially in the light of the
new legal changes which provide for the policyholders to have more
rights in claiming, especially when it comes to nonmaterial claims. One
very important development is the revision of the entire insurance
legislation in the light of the EU-accession process, where the main
focus and the most attention is being given to the freedom to provide
services requirement, MTPL liberalization, introduction of the elements
of the new financial regulation approach in order to keep up with the
global and European trends and moving towards a risk-based supervision.